Global M&A Activity Still Strong: A.M. Best | Canadian Insurance

Global M&A Activity Still Strong: A.M. Best

Agency counts 35 deals worth $5.6 billion so far this year

Growth in Asia and Latin America have kept the P&C industry busy with mergers and acquisitions this year, according to a new report from A.M. Best.

The agency’s report finds that there were 35 P&C and reinsurance deals around the world in the first half of the year, worth a total of $5.6 billion.

Read: 2014 May Bring More Insurance M&A: Report

This puts 2014 on track to edge out 2013, which saw a total of $10 billion in deals.

Though it fell just outside the window A.M. Best looked at, Ace’s recent acquisition of Itaú Seguros’ commercial business in Brazil—at a price of $700 million—exemplifies the trend in global M&A. Bringing in about $1 billion in premiums annually, ACE says that Latin America will now represent about 14% of its total premiums, or a six-point jump from last year.

Read: Insurance M&A Activity on the Rise: Survey

Under pressure from increased competition, low interest rates and lower insurance rates, many companies have also downsized, usually by jettisoning underperforming or non-core business lines.

A.M. Best also says that some insurers now understand that organic growth remains challenging, making acquisitions an attractive alternative to growing internally.

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